We will provide a framework for understanding the economic factors underlying the health care system and the interaction of its agents. For several reasons, standard economic models are not adequate to understand markets for health care. For example, it is difficult for the consumer/ patient to evaluate the quality of the services received. Costs are uncertain, and insurance reduces the incentive of the consumer/patient or physician to seek the most economical means of treatment.

We will focus primarily on the structure and economics of health insurance and the demand for health care, pricing of drugs and hospital services, cost-benefit analyses employed by payers and consumers of health care products and services, mechanisms used for paying physicians and its impact on the provision of care, and the role of information in the selection and provision of medical goods and services.

Courtney C. Brown Professor of BusinessFrank R. Lichtenberg is Courtney C. Brown Professor of Business at the Columbia University Graduate School of Business; a Research Associate of the National Bureau of Economic Research; and a member of the CESifo Research Network. He received a BA with Honors in History from the University of Chicago and an MA and PhD in Economics from the University of Pennsylvania.